Best crisis management 2016

Bermuda is a British Overseas Territory which is recognised as having high standards of governance and transparency in relation to its role as a prominent international financial centre. But in June 2015, the government was rocked by the news that it had been included on an EU ‘blacklist’ of 30 tax havens.

The blacklist, which attracted much media attention, was particularly harmful to Bermuda as it included other less reputable financial centres. To qualify for the blacklist, a country had to have been listed as a non-cooperative tax jurisdiction by at least ten EU member states.

Bermuda received 11 nominations, yet had signed tax information with all G20 and EU countries bar two. Agency Cubitt Consulting was tasked with creating a campaign to discredit the blacklist, ideally removing Bermuda, and repair the reputational damage to key stakeholders in its international financial centre.

Within hours of the list’s publication, Cubitt issued a statement detailing concerns about its compilation. Its primary concern was that the ten state threshold was arbitrary, and could be based on the opinion of politically motivated governments rather than fact. It also highlighted the non-conformance and lower transparency standards of several countries that had nominated Bermuda.

Cubitt persuaded the Financial Times to run the statement. The paper also listed the transparency standards of Bermuda, which had been upheld for longer than 70 years, and in many cases exceeded those of the UK. Media attention in the statement pressured Latvia and Poland to announce that they had not actually blacklisted Bermuda, making it ineligible for inclusion as now it had just nine nominations. Cubitt issued statements clarifying this point.

Having received a briefing from Cubitt, The Economist wrote a feature condemning the blacklist as ‘hypocritical’ and which praised Bermuda’s efforts in global tax cooperation. Cubitt also prepared the Premier of Bermuda Michael Dunkley for interviews with BBC Radio, BBC News and CNBC, which criticised the list and outlined Bermuda’s contribution to the UK in terms of jobs and critical financial services, such as reinsurance.

The EU started to backtrack, and agreed to make clear the efforts some blacklisted stated had made in tax matters. By mid-October, without any notice, the blacklist disappeared from the EU website.

To coincide with the Joint Ministerial Council of Overseas Territories in December, Cubitt arranged meetings between the Financial Times, The Sunday Times and Sky News and Bermuda’s Premier Dunkley and finance minister Bob Richards.

In each interview, they made three points. The majority of Bermuda’s financial services sector is built on the reinsurance industry, which provides a vital service in reducing risk and the cost of capital. Bermuda has kept a central register of beneficial ownership for more than 70 years, and provides all ownership information to foreign regulators and governments within 24 hours of receiving a request.

Bermuda has a sovereign right to set its corporate tax rate at whichever level it deems appropriate. Cubitt also alerted the Financial Times that the blacklist had been withdrawn, providing it with a scoop. This prompted a week of national press support for Bermuda’s position, and an acknowledgment by the UK Government that the country was committed to transparency.

‘This was a sophisticated strategy,’ said the judges. ‘It was wide reaching, and achieved good results and business outcomes.’